Question Time: Cancel old credit cards? Martin: What 3 laws would you introduce? Pay v pensions?

In this episode of The Martin Lewis Question Time Podcast, Martin takes on your consumer rights questions including to cancel or not to cancel old credit cards, higher paycheck or higher pension contributions, and if Martin were King for a day, what three laws would he introduce? There's a question about the rules when it comes to paying tax on benefit payments, Martin explains the rules and regulations. With so many competing credit card providers, Martin takes a question on how's best to balance closing old cards with maintaining your credit score, and how to hope between different cards unscathed. There's a question asked about a showdown between an impressively high pension contribution versus a potentially massive increase in pay. Martin explains the pros and cons of each. There’s also a feel‑good moment, with a success story from a listener who successfully used Gift Aid on their charitable donations, and Martin delivers a little refresher on Gift Aid for those who want to use it to the fullest. Plus, Martin considers an alternate universe where he is in charge of Britain, and thinks of three laws he would enact for the good of the consumer. If you want to ask Martin a question, you now can! His Question Time podcast lets you ask Martin absolutely anything and everything (within reason!) – so if you’ve always wanted to know his favourite ice cream flavour, if he’s ever pondered the meaning of life, or have a very complicated question about your personal finances, email it to [email protected] mailto:[email protected].

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

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• 0:05Speaker 01

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• 0:21Speaker 02

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• 0:40Martin Lewis?

  I wouldn't worry about the tax at the moment, I'd worry about the interest you're not earning enough. Listeners, this isn't good enough. There's a badge going, there's freebies. This is a podcast about saving money. I literally couldn't, apart from it's about cashback, I couldn't tell you anything you said at this point. The whole point of having a credit score is to enable you to get the right form of credit. Hello and welcome to the cunningly named The Martin Lewis Podcast. I do wonder what that's going to be about. And this is our Question Time episode where you, our extra savvy questioners, ESQs, get to ask me your questions on absolutely anything and everything, open brackets within reason, close brackets. And this week, you asked me, we're on benefits, so do we have to pay tax on savings interest?

• 1:23Martin Lewis?

  Should I close my old credit card to boost my credit score? Should we go for higher pay, lower pension, or lower pay, higher pension? Then we have a success on how giving to charity pays. And to finish, you asked me, what three consumer laws would I pass if I got the chance? I answered off the top of my head. Let me know what you think and let me know what you'd do too. Play the theme tune.

• 2:06Martin Lewis?

  Hello and welcome to this week's episode of our Question Time podcast. Yes, it's the one where you can ask me questions on anything and everything, open brackets, within reason, close brackets. Now, for those of you waiting for Professor Sir Dr Matthew Burnham Esquire, or even for PPS podcast producer Simon, oh no, that's not happening. Today, I have an existential question for you. When is a mat not a mat? I'm not sure I have an answer, but today we do have Matt with us, just not our usual Matt. Today's Matt is Matt Lansley, and I probably need to reveal on that a secret about the BBC.

• 2:47Martin Lewis?

  It has a mat cupboard where it keeps talented producers called Matt locked away until required. It's a little cramped space, not many perks, but some say there are so many mats because the BBC wants to walk all over them. Yet we won't have that type of talk on this podcast. We don't walk all over mats on this podcast, although it is new, so I might give it a go. So may I introduce, new to this podcast, the one and the only Question Time producer, Matt Lansley. Hello, Matt.

• 3:15Speaker 05

  Hello, Martin. It's so good to be here. Yeah, you're right, the cupboard is a little bit cramped sometimes.

• 3:20Martin Lewis?

  What can we know about the facilities? What do they have in there?

• 3:23Speaker 05

  Well, I mean, obviously, they have one computer to share between all the mats, but of course, it's only the highest ranked mats to get to use it first.

• 3:30Martin Lewis?

  So that'd be Matt Burnham, wouldn't it?

• 3:31Speaker 05

  Yes, of course, yeah. The listeners can't see, I actually have the number three tattooed on my forehead.

• 3:36Martin Lewis?

  Oh, no.

• 3:36Speaker 05

  So it goes Matt Burnham, Matt Chorley is Stephen File Live presenter, and then me, if I'm good. But, you know, it's a massive treat to be here. Thanks ever so much for having me.

• 3:45Martin Lewis?

  I'm going to pretend I'm delighted to have you, but I've just now I've heard that you're third ranked, I will be writing to editor Tom, saying, you know, why am I down the pecking order? What on earth is going on?

• 3:53Speaker 05

  But I believe Matt Chorley still stood outside number 10 Downing Street, I'm afraid.

• 3:56Martin Lewis?

  Okay, fine.

• 3:57Speaker 05

  So they had to haul me out.

• 3:58Martin Lewis?

  I don't want Matt Chorley producing me either. He'll make it all political. We don't want any of that. Anyway, Matt, it is lovely to have you on board. Thank you so much for joining us. You're going to be the curator of questions today. What do you have for me? What have you got first?

• 4:09Speaker 05

  Our first Esquire this week is the lovely Elaine. Elaine says, Dear Martin, we are a married couple in our 50s, and our only income is ESA Support Group and Carers Allowance, which I know are taxable income. We have £115,000 in savings and earn £2,300 in interest annually. So my question is, do we have to pay tax on our savings? Thank you very much, Elaine.

• 4:31Martin Lewis?

  Thank you for your question Elaine, but if you forgive me, I think you're asking me the wrong question. The first thing I hear in your question is, we have £115,000 of savings and earn £2,300 in interest annually. That's just not enough interest. There are lots of savings accounts paying you over 4%, some at 4.5%. That question should be, we have £115,000 in savings and earn nearly £5,000 a year in interest annually. So the most important start point is that you should be in savings accounts that pay more. I'm going to talk more about that in a moment, but let me answer your core question first, because it does impact the strategy whether you pay tax on the savings or not. Now, you get employment and support allowance, which isn't a means-tested benefit, although there are certain means-tested elements of it. You also get carers allowance. My guess is

• 5:16Martin Lewis?

  your total income from that is somewhere in the region of £200, £220, £230. I'm going to put it around that level. Which means annually, you're earning somewhere around £12,000 a year. Now, everyone is allowed to earn £12,570 a year from all earnings, including savings interest. So just on your ESA and carers allowance alone, I suspect you're earning below the taxable amount. But, for people who have low-earned income, there is a special savings allowance. It's called the starting rate of savings. And what that says is you can earn an extra £5,000 from savings interest alone if you

• 5:57Martin Lewis?

  are a low earner. So here's how it works. You've got up to £12,570. Now, for every pound of earned income you have above that, you lose a pound of that £5,000 allowance. It's really complicated to do in audio, but let me try. Imagine you had earned income of £13,570. That puts you £1,000 above the £12,570 allowance, which means your starting savings rate, the extra amount from the starting savings rate you can earn from interest on your savings tax-free is £4,000. If you earned £1,000 more from earned income, it would drop to £3,000. Plus, remember, as a basic rate taxpayer, you get £1,000 of personal savings allowance that you can earn from interest tax-free. So all in all, in your circumstance...

• 6:41Martin Lewis?

  I think depending exactly what your earned income is, you could probably have earned income plus savings, interest totaling up to around eighteen thousand pounds and not pay any tax on it. And from what you've told me, you're not close to that. And even if I boost your interest to five thousand pounds, I still don't think you would be close to it. And you could always put some in a cash ISA where the interest is tax-free anyway. So on to what I think is probably the more important part. What do you do? Unless your savings accounts are currently fixed, you're free to take money out and put them in a new savings account. So I'd probably be putting some into a cash ISA, just as rates are high. Top paying cash ISA at the moment is trading two one two. It's got a promo rate at the time of me recording this at four point six two percent, but that does vary.

• 7:24Martin Lewis?

  It's a cash ISA, so you could put twenty thousand pounds in each, so you could have forty thousand pounds that is never taxable. After that, for large amounts of money, easy access, you've got something like Chase, which pays four point five percent for new customers, assuming you're not a customer there already. Now, the key thing with Chase is you have to open its bank account to get it, but its bank account you can just open without switching to, and it doesn't do a hard credit check, and you work it via an app, and it pays you four point five percent interest. After a year, the rate will drop and you'll want to switch elsewhere, but you'll get the four point five percent. And the rate it drops to is still better than what you're earning at the moment, to be honest. You've also, if you could lock money away for a guaranteed rate, there's a nice offer at the moment from Marcus, which is part of Goldman Sachs. It's another app-based bank.

• 8:06Martin Lewis?

  You simply go to Marcus and you can get a one-year fixed savings account at four point six percent. That's only a smidge below the Best Buys, but uniquely as a non-cash ISA fixed-rate savings account, it allows you to close the account early if you needed to withdraw money. You would pay an interest penalty, ninety days' worth of interest for doing that. So it isn't something you should be putting money in if you think you're going to need the money. But it's a great way to lock money away, get a guaranteed rate with the option, if you really needed it, of taking money out. And there are just loads more accounts over four percent if you don't like the app-based accounts. There are good information sources online. So my most important thing for you is, I wouldn't worry about the tax at the moment. I'd worry about the interest. You're not earning enough. Elaine, I hope that helps you. I suspect life is quite difficult,

• 8:49Martin Lewis?

  because I know that earning a support allowance is a benefit for people who have a disability or health condition that limits your ability to work. So it's really important that you make those savings work as best as they possibly can for you.

• 9:04Martin Lewis?

  So, we're going to question two now. Now, Matt, the Other Matt's format is at this point we have a caller. Are you following Other Matt's format, or are you being your own Matt?

• 9:12Speaker 05

  He's already left me several very threatening voicemails, actually, for not following his format quite strictly, so I apologise to Other Matt for that. This week, people were just very busy, I'm afraid, and a little bit reluctant to get in touch.

• 9:22Martin Lewis?

  Were you offering them the badge? Did they know about the ESQ? Did you know about the ESQ badge that they would get if they call in on the show?

• 9:30Speaker 05

  I'd heard legend and tell of the ESQ badge, no one bit this week, I'm afraid.

• 9:34Martin Lewis?

  Listeners, listeners, this isn't good enough. There's a badge going, there's freebies. This is a podcast about saving money. There was a freebie available and some of you didn't take it. Hang your heads in shame, people. Hang your heads in shame. As for you, Matt, I think we need a voice or something. I think you have to put on a different voice and we can pretend it's a caller.

• 9:54Speaker 05

  Well, that is quite a challenge to lay at my doorstep, but I will...

• 9:57Martin Lewis?

  I can just hear you going, "Oh, please don't do this to me." I'm doing it, though, Matt. I'm sorry, that's the nature of questions, aren't we? We put people under pressure, we make them feel a little bit awkward. Not our callers, we make you feel nice. But this is about the producers. So, Producer Matt, what voice are you using?

• 10:12Speaker 05

  Well, I can do a half-decent Australian.

• 10:15Martin Lewis?

  Let's do it.

• 10:16Speaker 05

  That wasn't it then, but I could do...

• 10:18Martin Lewis?

  Is this a long or short question?

• 10:20Speaker 05

  It's a fairly long question, but I will give it a go.

• 10:23Martin Lewis?

  Give it a go. We'll get to a few sentences through. If it's a nightmare, I'll let you off, otherwise we'll keep going. How about that?

• 10:30Speaker 05

  Challenge accepted. Let's do this.

• 10:33Martin Lewis?

  We're just going for this?

• 10:35Speaker 05

  I will.

• 10:36Martin Lewis?

  I'm not being mean, I'm not being mean.

• 10:38Speaker 05

  No, no, no, I'm gonna look very capable at the end of this, don't you worry.

• 10:41Martin Lewis?

  Okay, go for it.

• 10:43Speaker 05

  So, this question comes in from Alison, just to get that out of the way before this descends into madness. "Dear Reizy Metten-Martin..."

• 10:51Martin Lewis?

  And they addressed it to Matt. It was another Matt, but we'll go with... Keep going, I like it, go on.

• 10:54Speaker 05

  Yes, and there's a note from Reizy saying that's the correct way to address emails, so we'll bear that in mind going forwards.

• 11:01Martin Lewis?

  It's very good.

• 11:03Speaker 05

  I'm looking for some advice regarding cashback reward credit cards and how changing them affects your credit score. I'm gonna throw in a mate there. I currently have a cashback credit card that I've held for at least five years. In the first year, it offered a very good cashback percentage, but over ti- over time...

• 11:19Martin Lewis?

  I'm gonna have to stop you, because just every time you say cashback.

• 11:23Speaker 05

  Kishpic? Try saying vanilla air freshener in an Australian accent.

• 11:27Martin Lewis?

  Completely, I literally could, apart from it's about cashback, I couldn't tell you anything you said at this point. I've just completely lost focus.

• 11:34Speaker 05

  Kishpic, oh no. Would you like me to continue?

• 11:38Martin Lewis?

  I don't know what I want. I think, I think I need to do my jo- I think, I think you need to go back and read it in your normal voice, because I've lost it.

• 11:47Speaker 05

  Okay, I'm, I'm very sorry that my accent was so good, that it literally disrupted the-

• 11:51Martin Lewis?

  Kishpic.

• 11:52Speaker 05

  Kishpic, yes. Let's go over to my disk-

• 11:55Martin Lewis?

  It doesn't know Rosie is also in hysterics. For, for, for regular listeners, you'll know Rosie is the guardian of all of the facts. She's here but never heard, and Rosie's also, tears in her eyes, a bit like me. Okay, Matt, why don't we start again?

• 12:07Speaker 05

  Understood, and, and would you like my traditional non-

• 12:09Martin Lewis?

  Just, just you.

• 12:10Speaker 05

  Non-specific English tones.

• 12:11Martin Lewis?

  Just you, no Kishpic.

• 12:12Speaker 05

  Okay, kishpic. Right, uh, no, stop. Dear Rosie, Matt and Martin.

• 12:17Martin Lewis?

  Good.

• 12:18Speaker 05

  I'm looking for some advice regarding cashback reward credit cards and how changing them affects your credit score.

• 12:23Martin Lewis?

  Got it.

• 12:24Speaker 05

  I currently have a cashback credit card that I've held for at least five years. In the first year, it offered a very good cashback percentage, but over time, the rewards have dropped to almost nothing. Because of that, I'm considering opening a new cashback card elsewhere to take advantage of better introductory offers. However, I've heard that closing old credit card accounts can negatively affect your credit score and your history with lenders. I'm also concerned that opening a new cashback card every year and then closing old ones might make me look risky to lenders, even though I always pay my balance off in full every month-

• 12:54Martin Lewis?

  In full!

• 12:55Speaker 05

  And never carry debt. What would generally be the best approach in this situation? And then they've given you sort of a multiple choice.

• 13:00Martin Lewis?

  Okay, I like, that's like a mastermind.

• 13:02Speaker 05

  Is it better to keep the old card open and apply for a new one? Close the old card after opening a new one? Or avoid switching cards too often? I'd really appreciate any guidance on how to balance getting better cashback rewards while still maintaining a strong credit profile. Many thanks, Alison.

• 13:18Martin Lewis?

  Thank you so much for your question, Alison. As I always say, credit scoring is more art than science, so there is no hard answer behind this. And in a way, I would mainly say I wouldn't get too hung up about it. This isn't going to have, in the long run, a huge effect. There might be a short-term dip in the credit score your credit reference agencies give you. Remember, they are just a loose indication of how that credit reference sees you as a typical customer. But each firm scores you, when you actually apply, scores you differently based on its own wish list of what it wants. And this one is really interesting because there are lots of different factors at play here. Firms tend to like evidence of longevity.

• 14:03Martin Lewis?

  So when you're closing and when you're switching, that is miningly negative. But then, when they assess you, two of the big factors that they look at when they're credit scoring is your debt ratio, your unsecured debt percentage of annual income. Well, that's unaffected by you having these credit cards. It doesn't change. You're not talking about borrowing more, you're just talking about using a different credit card for doing so. But more interestingly is your credit utilisation, which is the percentage of available credit used. Now, you could argue that by keeping an extra card open and increasing the amount of credit you use, if you're not spending any more, your debt as a proportion of the credit that you have is actually reduced. So there is an argument that having more credit would benefit you. But credit utilisation only tends to really be an issue if you've got a high debt ratio,

• 14:48Martin Lewis?

  if you're using a high proportion of your annual income as unsecured debt, which by the sound of it, if you're talking cash-back credit cards, doesn't really matter. My main reason for keeping a card open would be if they ever gave you existing customer card offers. If not, my preferred way of doing this, if you don't need the credit, I would keep it tidy and get rid of old unused credit cards. While you may take a short-term credit hit, it's only going to be minor. Don't do it just before you're about to make a big application. Like, if you're about to get a mortgage, you're about to do some... In fact, it's probably even important I go there. I'm just going to change tack slightly before I finish that. I tend to think of your credit score, again, it doesn't actually exist as a concept, but building up your credit worthy enough as you like, a bit like savings.

• 15:33Martin Lewis?

  You're saving it up for when you need it. And what I always find quite... Not in a funny way, but in sort of, it's a strange way of thinking. People get so worried about lowering their credit score that they don't do anything. Well, the whole point of having a credit score is to enable you to get the right form of credit. It's to enable you to get a cheaper mortgage. It's to enable you to get a cheaper balance transfer. It's to enable you to get a good and high paying cash back credit card. So the idea that you would not get a good and high paying cash back credit card to protect your credit score is a false logic. You protect your credit score so you can get a good, high paying cash back credit card. Now, there is a hierarchy of usage here. Mortgage most important, clearing off expensive debt second most important.

• 16:19Martin Lewis?

  But by the sound of that, not many of those other things apply. So what you really want to do is do what's right for you first. You've got that credit score, utilize it on the thing that will give you the most improvement, which is in this case, unless there's elements you haven't told me, which would change circumstances. In this case, is getting your cash back credit card. As for closing the old card, I would probably do it. If you're doing this once a year, it might have a short term hit on the score that you see. But it shouldn't really be a case of, that is going to last a long time and give you a real detriment in a way that was stopping you getting any big important products. Just be careful you're not doing lots of different transactions, lots of different applications in too short a space of time. People worry way too much about small moves in their credit scores from the credit reference agencies. So many people get in touch with me and say, it's dropped three or four points.

• 17:03Martin Lewis?

  And it's like, who cares? Three or four points is nothing. If it drops 200, something systemic is going wrong. If it drops three or four, it's likely just how that particular credit reference agency is scoring based on something very, very minor. Don't sweat the small moves. So I think you're fine to go and get your Kishbeck card whenever you want.

• 17:22Speaker 05

  Oh no, I've got threatening voicemails from producer. I'm now banned from the entire nation of Australia.

• 17:28Martin Lewis?

  Yeah, that's fine. I don't think producer, well, actually, Professor Sir Dr Matthew Burnham Isquite is the type of person who would think he has the power to ban you from Australia. I could hear him saying that. I could hear him doing it.

• 17:38Speaker 05

  Oh no. Okay, right. I'm moving on and muting my emails.

• 17:44Martin Lewis?

  Okay, so I think we're all callers. Do we even have later? Do we have a voicemail perhaps?

• 17:49Speaker 05

  Yes, we do. We have a voice note standing by.

• 17:51Martin Lewis?

  Okay, so good. So we're going to hear someone's voice other than me, producer Matt, an Australian producer Matt, at some point in this podcast. That's good to hear. What's your next question for me, Matt?

• 18:01Speaker 05

  Well, we're going to do something a bit different now. We're going to go to one of our success stories that we get sent sometimes. Always great to hear. This one's from Sarah in Scotland. I'm not going to do an accent, don't worry.

• 18:10Martin Lewis?

  I'm slightly disappointed. I'm just looking at Rosie. Rosie, do I try and push Matt to do a Scottish accent, or do I leave it? Rosie's giving me a slightly askance look. She thinks we might offend some of our Scottish listeners, and therefore I think I've been told we can't do it.

• 18:26Speaker 05

  My Scottish accent is far worse than my Australian. That should tell you everything you need to know.

• 18:30Martin Lewis?

  Okay, that's fine.

• 18:31Speaker 05

  So here's our success story then, sent to us by Sarah in Scotland. "Hi, Martin. I have been a higher rate taxpayer for a couple of years now and give regularly to a number of charities using Gift Aid. Following your advice, I wrote a letter to HMRC. I was over the amount of giving which can be claimed online and asked for my tax code to be changed, listing all my Gift Aided giving. They have now changed my tax code and have sent me a £1,790 rebate. It is especially useful living in Scotland as you become a higher rate taxpayer at a much lower income threshold. Thanks so much. Sarah in Scotland."

• 19:01Martin Lewis?

  Absolutely a pleasure, Sarah, and thank you so much to giving to whatever charities you chose to give to. So people will know Gift Aid, if you're a UK taxpayer, you are allowed to tick the Gift Aid box when you donate to a charity, and the charity automatically gets the 20% tax that you paid back. Now, because of reciprocals, so if you donate £80, it gets £20, and £20 on 80 is 25%, so the charity gets 25% on top, which is a needlessly complicated explanation I've just given you, so ignore that if you didn't get it. But the point is, if you're a higher rate taxpayer, or top rate taxpayer, or in one of the different bands that are in Scotland, you are entitled to get back any excess tax

• 19:42Martin Lewis?

  you paid above the 20%. So if we take the very simple example of somebody in England who is a higher 40% rate taxpayer, if you get paid £100...

• 19:53Martin Lewis?

  You take home sixty, we'll ignore national insurance. The charity can claim twenty pounds, so that puts you up to eighty. There's another twenty quid there. And if you fit in your gift aid in your self-assessment tax return, or you get in touch with HMRC if you're not doing a self-assessment tax return, you can claim that extra tax back. Now, of course, you could also then donate some of that to a charity too and claim extra gift aid back on the top of it if it all fits. But yes, we've done this before, talked about it in the pod before. It's amazing how many people who are high rate taxpayers who don't realise that when they do gift aid, there's a little bit of extra money that's yours and you could even just make a bigger donation to charity, knowing it's coming back to you and you should claim it. Thank you so much, Sarah, for getting in touch. That's really appreciated.

• 20:38Martin Lewis?

  Now, we're going into our last question of the day, I presume. Is this the voice note or is that the funny?

• 20:45Speaker 05

  The voice note is the funny. The voice note is awaiting you in the very near future.

• 20:49Martin Lewis?

  All right, Matt, we're not going to do any accents. We're just going to keep this totally straight. Let's get into it.

• 20:54Speaker 05

  So this one comes in from Paul. Hi, Martin and the presenter, brackets, Matt.

• 21:01Martin Lewis?

  I mean, Paul, it's all very well to butter up Matt Burnham. Matt here, of course, is not jumping above his station, but Matt Burnham certainly is with that. It's fine to butter him up, but you still want me to answer your question. I think you need to be a little bit more careful. I mean, I could say scrap this question, let's go to a new one. If I said that, Matt, would you allow it?

• 21:19Speaker 05

  Absolutely not. We've got Paul's question in front of us. We need to, we need to get him his answers, Martin.

• 21:24Martin Lewis?

  Spoil, spoil, carry on then.

• 21:26Speaker 05

  I'm asking on behalf of my girlfriend. She currently works for an employer and earns around £28,000 a year with an employer pension contribution of 28%. She's been offered a new job that pays £34,000, but the new employer's pension contribution is only 6.5%.

• 21:42Martin Lewis?

  Yeah, I'm just filtering that. Pension contribution, 28%. That is absolutely huge. I'm guessing it might be a final salary type contribution at that type of level. But carry on.

• 21:52Speaker 05

  She is 47 and has been employed with the 28% Pension Contribution Company for 25 years. Would she be better off for her pension earnings into her pot by moving job or staying where she is for the betterment of her current employer's contributions? She would not be able to increase her contributions to make the difference with her new employer. This is all assuming she works till retirement age. Any advice would be immensely appreciated. Paul. Love your work and genuinely think you should be nominated for a knighthood. Personal opinion, but I'm sure many agree.

• 22:20Martin Lewis?

  Oh, well, thank you very kindly for that, Paul. So let me just do some numbers off the top of my head. The first job is £28,000 but with a 26% or 28% contribution. So that's around an £8,000 extra pension. So puts you at around 36 grand. Second job would pay you £34,000 with a pension of around £2,000. So that's also 36 grand. So the total remuneration package is pretty similar on both. I have to be honest, I don't quite understand the line. What was, what was it? Matt, was it she wouldn't be able to? What's that line?

• 22:52Speaker 05

  Paul says she would not be able to increase her contributions to make up the difference with her new employer.

• 22:57Martin Lewis?

  I don't understand why not. I need to be honest. You're earning £6,000 more. The difference between the pensions on my back of the envelope calculation is just under £6,000. You could easily put the entire £6,000 pay rise into your pension and you'd have exactly the same cash flow on the second job as the first job and the same pension. So because the total amounts are the same, and remember, your pension contribution comes from pre-tax income. So it's not a question you're thinking, well, I'd only actually get in my pay packet this amount. It's coming from pre-tax income if you're doing it the right way. So I don't understand why not. For me, this is very close. What I need to be careful of is that we're comparing like for like. So there are two main types of

• 23:37Martin Lewis?

  pensions, defined contribution and defined benefit, better known as money purchase and salary schemes. Money purchase is where you build up a big pot of money, hopefully if you're lucky, and you use that for your pension provision. Final or average salary schemes are where each year you earn, let's say you earn a third of a year's salary in pension contributions and what you get at the end is a percentage of your final or your average salary. So if those, if it's those two schemes, then it really is difficult to compare and you would need to get a, a projection on your current scheme, which is likely to be the final salary scheme, if you stayed until retirement versus leaving now. And you should be able to ask them for that. But if I assume they're both money purchase schemes, I think

• 24:20Martin Lewis?

  they're pretty much of a muchness, based on what you've told me. I may be mussing something, so this is only back of the envelope. And ultimately then, I think this is far more about which job is better for you. Which job would make you more happy? Which job would give you the better lifestyle? Which job has better career progression? Does one of these jobs offer a higher salary if you stay in it for five years and you progress than the other one? I think all of those factors are just as important at looking at the, you're just taking a, a snapshot of the income on the day that you move and the pension on the day that you move. So forgive me for not being able to answer. It's far more complicated if maybe it's a civil, I don't know if she's a civil servant. It's a civil servant pension currently, because that's the sort of 28% contribution. And, and it's very, that's a gold plated type pension, depending on the scheme that you're

• 25:05Martin Lewis?

  in. But if it's not, then it's much of a muchness. Sorry for going around there, but hopefully some interesting thoughts in the discussion for you anyway.

• 25:14Martin Lewis?

  So we've had our four questions. And in the format, this is now the funny, or less a funny, more in a scant, a different, a non-practical money-saving question.

• 25:24Speaker 05

  And yes, for the funny this week, Martin, we've got a voice note for you.

• 25:28Speaker 06

  Hi, Martin. I'm Matt number two. As you know, MPs have the chance to introduce private members' bills. If one came to you and said, what three new rights would you like to add? Or indeed, what would you like to take away for an old bad law? What would your thoughts be? Love the show and look forward to your ideas. Thank you.

• 25:49Speaker 05

  Now, Martin, I'm going to be strict. I know you've got ideas far above your station, but I'm going to keep this, I'm going to keep this to consumer rights only, please.

• 25:57Martin Lewis?

  Comes and does one podcast tells me I've got ideas above my station. I can't believe it. Okay, so let's have a think. Three. Now, as always, like most people, things I'm currently working on tend to come to mind most pressingly. I put out a statement just before the King's Speech on something I work on with my Money and Mental Health Policy Institute charity, which is I was very disappointed this year that we're not getting independent regulation of bailiffs. So many people in the country who have bailiffs knocking on their door have mental health problems. I get far too many cases of distress, upset, bullying, bad treatment coming from bailiffs. That is not to say all bailiffs are bad, but it is to say that there are too many cases of bad behaviour from bailiffs. I simply think

• 26:39Martin Lewis?

  for an industry that is doing what it's doing, coming into people's homes and taking their stuff, and so many of those people are vulnerable people, I do not think you can rely on self-regulation in that sector. And I think it's absolutely outrageous that yet again no government is putting in to have a proper independent regulator of bailiffs. So that will be my first one. Second one, on consumer rights, you say. Yeah, look, very simple.

• 27:04Speaker 05

  Consumer rights only.

• 27:05Martin Lewis?

  Going back to when they brought in the Consumer Rights Act, I gave evidence to that parliamentary committee, for the Bills Committee, I think it's called. And one of the things I said at the time was, because they basically wanted to say, don't you like all these new rights and these stronger consumer rights that we're putting in? And I did. I was in favour of it. But I said, the biggest problem is, the only way to enforce these rights is to go to court. And if you've got a faulty kettle or a faulty toaster, going to court is really difficult, is off-putting. So people have these rights, but they can't enforce these rights if you have a dispute with a company. So I would probably put in

• 27:46Martin Lewis?

  a bill for a low-end ombudsman alternative dispute resolution type. I mean, frankly, with the growth of AI, we could even have AI doing it. It may not give perfect adjudications, but at least it'd give people a chance of having a cheap and easy and quick and hopefully free adjudication, where if they're having a consumer rights dispute, they can go to some form of independent third party, go to them and get a proper resolution that is binding on the companies involved if there's a disagreement. And I think that would be very useful strictly on your consumer rights area that you gave me. And the third one, and yeah, I mean, this is one I've been calling for for at least a decade. I'm going to count this as consumer rights, you may not, but hey, it's my podcast, all right?

• 28:30Martin Lewis?

  Student finance. Student finance has been a political football for a very long time. And one of the great problems is the terms at which people get their student loans are not locked down. So what I would like to see is a statute that locks in the terms when you get them. Now, there is some flexibility here. You could say certain terms are fixed and certain terms are variable. So let's take an example, you know, if you are repaying nine percent of what you earn above a repayment threshold that goes up with inflation for thirty years. I would say the nine percent is probably fixed, the thirty years is probably fixed, and the repayment threshold is probably variable within certain constraints.

• 29:13Martin Lewis?

  And that should be enshrined in law so that when young people aged eighteen are signing up for a contract that with the current Plan Five student loans is a forty-year contract for many of them, and they're doing it at eighteen when they don't understand the financial system, they should have at least some transparent, rigid understanding of what this is actually going to mean, without allowing secondary legislation, that's delegated legislation, i.e. those that don't have to pass a vote in Parliament, to be able to change it at the whim of a future government. So I would like to see the terms locked in at the point that you get them out. My entire campaign about the current Chancellor freezing the repayment threshold, if it had been announced, I mean, I don't want it to happen, but if students had been told when they signed up that the repayment threshold is variable and it can be changed and it

• 29:58Martin Lewis?

  can be frozen, then while I wouldn't like it, I wouldn't feel it's the moral breach that I think it is right now, which is a retrospective breach of contract. So I would like to see, my third rule is I'd like to see student loan terms locked in by statute with a knowledge of what is fixed and what is variable. They're such long terms, there's such a misbalance of power between the state and the people who take out the loans, that it should not just be left up to the whim of ministers. And, and of course, as I always say, Parliament is omnipotent. If it is locked into statute, and if a government really wanted to change the rules, then it could take a vote to Parliament and it could change them in future.

• 30:39Martin Lewis?

  And I think it needs to be that level of materiality, that level of force that should be in place before they can change it. I got quite serious then, didn't I? Not really the funny, but I do think it's an important point.

• 30:49Speaker 05

  No, nothing wrong with getting serious at the end. I'm just glad you didn't go down the route of deigning that every Thursday going forward is now Martin Day or something like that.

• 30:56Martin Lewis?

  Only on Five Live.

• 30:58Speaker 05

  Only.

• 30:59Martin Lewis?

  Only on Five Live, or for people who are listening to the podcast on these days. I think we managed to, well done, I think we managed to navigate quite well, you being another Matt rather than the normal Matt, even though people are writing to our Matt rather than you, but you very kindly stood in.

• 31:14Speaker 05

  It's no problem at all. I'm very used to it. I frequently work on Matt Chorley's show on Five Live, working for an editor called Matt, and then I'm called Matt. So frequently people get my attention by just throwing things at me.

• 31:24Martin Lewis?

  There really is a Matt cupboard at the BBC.

• 31:27Speaker 05

  You heard it here first.

• 31:29Martin Lewis?

  Matt, thank you very much. It's been wonderful to have you. How have you enjoyed your first experience of doing Question Time?

• 31:35Speaker 05

  My, my small taste of power has been fantastic. Thanks so much for having me. I'm going to go and reply to all those angry voicemails from Australians and, yeah, main producer Matt.

• 31:44Martin Lewis?

  Okay. Thank you very much to today's curator of questions, Matt Lansley, everybody.

• 31:48Speaker 05

  Thank you. Thank you so much. All right. No. All right. That's enough. That's too much. You know I'm not the other Matt, don't you? Yep. Thank you. Thank you so much.

• 32:01Martin Lewis?

  And that is it for this week's Question Time. Don't forget to subscribe so you know when we release a new episode. We put out a new Question Time pod each Monday alongside the Big Topic podcast with Adrian on Thursdays. Aren't you lucky? Two doses of money-saving tips and tricks a week. Yes, a veritable bog off. And that's what I'm just about to do. But if you've got any questions, do send them in. You can email [email protected]. Bye bye.

• 32:58Speaker 07

  The offers and rates mentioned in the podcast are correct at the time of recording. However, if you are listening on demand, it's worth double checking as details can date. Remember to subscribe on BBC Sounds and leave us a review however you listen.

• 33:20Speaker 01

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